TRAI’s SMS Licence Raj – Part 3

A day before Diwali, TRAI changed some rules yet again and slapped a 5 paise surcharge on promotional SMSes. Effective immediately. No notice period whatsoever.

A 5 paise surcharge where the average price is in the region of 2.5 paise is a crushing blow to the industry. The result was a trebling or in some cases quadrupling costs. Campaigns had to be halted instantly.

Of course, the SMS industry is a small one (about Rs 200 crore in all). It may also take a while for consumers to notice what they are missing: information that would be otherwise readily available and could help them economically  in daily services or with information on buying of goods or services, no longer being available on the medium most accessible to them – the mobile.

The fact that a regulator can act so arbitrarily repeatedly in 2011 is what is shocking. As a colleague put it: “TRAI’s solution to the SMS issue is comparable in stupidity and overprotectiveness to the One-Time Password for IVRS payments and 3D Secure Code for online payments. These solutions are like isolating a PC from Internet to protect it from viruses.”

Continued tomorrow.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.